GERMAN Chancellor Angela Merkel has been dealt a Brexit blow after it was estimated the UK’s exit form the EU next year could cost Germany up to €7 billion per year.

The estimate of a cost of €6 billion to €7 billion to Germany for the period following Brexit takes into account the German contribution, which will compensate for the missing €14 billion after the UK’s planned exit from the EU from March 29, 2019.

Experts have also included the end of the rebate system for payments by member states to the EU in their calculations.

This is double the additional payments of €3billion to €3.5 billion that EU Budget Commissioner Günther Oettinger had set out in February.

At the time, Mr Oettinger said this calculation would finance both the gap created by Brexit and other tasks such as border protection and the fight against terrorism.

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Britain's exit from the EU could cost Germany up to €7 billion per year

This is double the additional payments of €3billion to €3.5 billion that EU Budget Commissioner Günther Oettinger had set out

The estimates of Germany’s costs, according to a report from German news magazine Focus, citing people familiar with the processes at the Federal Ministry of Finance, comes despite a Finance Ministry spokesman saying it is too early for Brexit’s costs to be determined.

And German MEP Elmar Brok has warned that hope of the German Chancellor compromising for a special Brexit trade deal do not “exist in reality” as the Chancellor is expected to fight for the integrity of the single market to protect businesses in the country.

But Mrs Brok suggested Germany will not bow to demands for a special trade arrangement with the UK in order to protect Germany business - despite further studies showing a hard Brexit could cost Germany more than £60 billion.

Speaking alongside French President Emmanuel Macron at the EU Summit in Brussels on Friday, Mrs Merkel said Brexit negotiations would not be easy for Britain, despite talks advancing to a trade stage.

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Günther Oettinger had set out additional costs of €3 billion to €3.5 billion

The German Chancellor warned the next stage will be "very intense" for EU negoatiators and also insisted that time was "running out" for a deal to be struck.

The report comes as debate over the EU referendum rages in Westminster.

Jeremy Corbyn has accused the Government of turning "wild claims and red lines" into "climb downs and broken promises" in Brexit talks.

He told Theresa May that ministers "wasted months and months dithering and posturing before accepting the inevitable".

It came as the Prime Minister updated MPs on the transition agreement that was reached with the EU at last week's European Council.

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"The Government wasted months and months dithering and posturing before accepting the inevitable," said the Labour leader.

"This is the consistent pattern of these Brexit talks. Wild claims and red lines quickly become climb downs and broken promises."

He said insecurity for families and businesses as well as confusion at the heart of Government had dogged the first phase of Brexit negotiations.

Mr Corbyn urged Mrs May not to withdraw from Euratom until suitable alternatives had been put in place, as well as saying the Government had come up with no credible solution to the Irish border issue.

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He also criticised the Prime Minister over the controversial UK passports contract, saying: "It seems her red, white and blue Brexit has become the blue, white and red of the flag of France.

"Time after time, the Tories sell off British assets and jobs to the lowest bidder."

Mrs May could be seen laughing when Mr Corbyn said an implementation period had first been mooted by Labour, while she also attacked his initial call to trigger Article 50 immediately after the referendum.

She added: "It's the right honourable gentleman who when the shadow home secretary backed a rerun of the referendum, kept her in her job, when the then shadow Northern Ireland secretary backed a rerun of the referendum, he was sacked."